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The City of Imperial Falls contracts with Evergreen Waste Collection to provide solid waste collection to households and businesses. Until recently, Evergreeri had an exclusive
The City of Imperial Falls contracts with Evergreen Waste Collection to provide solid waste collection to households and businesses. Until recently, Evergreeri had an exclusive franchise to provide this service in Imperial Falls, which meant that other waste collection firms could not operate legally in the city. The pricu per pound of was collected was regulated al 20 percentabave the average lotal cost of collection Casi data for the most recent year of operations for Evergreen are as follows: Administratte cost Operating coststrucks Other collection costs $ 404,000 1,300,000 324,000 Data on customers for the most recent year are: Number of customers Waste collected sans Households 12,400 4,400 Businesses 3,800 12.800 The City Council of Imperial Falls is considering allowing other private waste haulers to collect waste from businesses, but not from households. Service to businesses from other waste collection firms would not be subject to price regulation. Based on information from neighboring cities, the price that other private waste collection firms will charge is estimated to be SD.04 per pound (SB0 per ton) Evergreen's CEO has approached the city council with a proposal to change the way Coats are allocated to households and businessee, which will result in different rates for households and businesses. She proposes that administrative costs and truck operating costs be allocated based on the number of customers and the other collection costs be allocated based on pounds collected. The total costs allocated to households would then be divided by the estimated number of pounds colected from households to determine the cost of collection. The rate would then be 20 percent above the cost. The rate for busines888 would be determined using the same calculation Required: a. Based on cost data from the most recent year, what is the price per pound charged by Evergreen for waste collection under the current system (the same rate for both types of oustomers)? (Do not round Intermediate calculations. Round your answer to 3 decimal places.) Price per pound b. Based on cost and waste data from the most recent year, complete the following table to determine the price per pound charged to households and to businesses by Evergreen for waste collection of the CEO's proposal were socepted? (Do not round Intermediate calculations. Round your Average allocated cost per pound" and "Price" answers to 4 decimal places.) Households Businesses Allocated cost per customer Total allocated coat Average allocated cost per pound Phoe
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